South SudanTax Obligations Detailed

As of today, February 5, 2025, employers in South Sudan have various tax obligations, including payroll taxes, social security contributions, and withholding taxes. These obligations are subject to change based on new legislation.

Personal Income Tax (PIT)

• Tax System: South Sudan uses a progressive personal income tax system with rates ranging from 0% to 20%.
• Tax Residency: Residents are taxed on their worldwide income. Non-residents are taxed only on income sourced within South Sudan. Residency is determined by being present in South Sudan for 183 days or more during the tax year.
• Tax Year: The tax year for individuals is the calendar year (January 1 to December 31).
• Filing Deadline: Individual income tax returns must be filed by April 1st of the following year.

Social Security Contributions

• National Social Insurance Fund (NSIF): Employers are required to contribute 17% of the employee's gross salary to the NSIF.
• Employee Contribution: Employees contribute 8% of their gross salary to the NSIF.
• Pension Deduction: Employee contributions to government-approved pension schemes (up to 8% of gross wages) are deductible from their gross income.

Withholding Tax (WHT)

• General WHT: Employers are obligated to withhold taxes from employee salaries and remit them to the South Sudan Revenue Authority (SSRA). This tax is withheld at the source and remitted monthly.
• Specific WHT Rates: While the standard WHT rates are 10% for dividends, interest, and royalties paid to residents and non-residents, there are other specific WHT rates applicable such as 20% for technical/consultancy fees or renumeration for part-time work. Moreover, rent payments are subject to 20% WHT for residents and 10% for non-residents.

Business Profit Tax (BPT)

• Advance Payment on Imports: The Financial Act 2024/2025 reintroduced a 4% advance payment of Business Profit Tax on imported goods.
• Rental Income Tax: A 30% tax on rental income was introduced for businesses exclusively operating in the real estate sector, subject to allowable deductions.

Other Relevant Information

• Tax Currency: While tax returns can be filed in USD, taxes should generally be paid in the currency in which the income was earned (SSP or USD).
• Penalties: Penalties apply to late filing and payment of taxes. A 5% monthly penalty is applied to unpaid taxes, with interest accruing at 120% of the commercial bank lending rate.
• Tax Identification Number (TIN): It is necessary for anyone earning an income in South Sudan to register for a TIN. This can be done through the NRA website, at NRA offices or through an authorized agent.
• Exchange Rate for PIT: A fixed exchange rate of 23 SSP to 1 USD is used for calculating personal income tax withholding from wages and salaries to simplify calculations.

This information is for general guidance only and should not substitute professional tax advice. Consulting with a tax professional is crucial for specific situations and up-to-date information.

Employee Tax Deductions in South Sudan for 2025

As of February 5, 2025, employers in South Sudan are responsible for deducting several taxes from employee salaries, including Personal Income Tax (PIT), social security contributions, and potentially withholding tax depending on the nature of the income. This overview details these deductions and other relevant tax obligations.

Personal Income Tax (PIT)

• Tax Rates: Progressive rates ranging from 0% to 20%, applying to both residents and non-residents. Non-residents are taxed only on South Sudan-sourced income. Residency is determined by being present in the country for 183 days or more within the tax year.
• Tax Year: The calendar year (January 1 to December 31).
• Filing Deadline: Individual tax returns are due by April 1st of the following year.
• Personal Relief: SSP 3,600 per year.
• Deductible Pension Contributions: Up to 8% of gross salary contributed to a government-approved pension fund.

Social Security Contributions

• Employee Contribution: 8% of gross salary. Contributed to the National Social Insurance Fund (NSIF).
• Employer Contribution: 17% of the employee's gross salary to the NSIF.

Withholding Tax (WHT)

Several categories of income may be subject to withholding tax, meaning the payer deducts the tax and remits it to the government. Some relevant rates in 2025 include:

• Government Contracts: 15% for resident contractors, 20% for non-resident contractors.
• Rental Income (for real estate businesses only): 30% of rental income. Note that this is a separate tax and does not apply to individuals renting out personal properties.
• Mobile Money Commissions: 10% of commissions paid to dealers.

Other Tax Considerations

• Advance Business Profit Tax (BPT): A 4% advance BPT is levied on imported goods and can be claimed as a credit against final BPT liability. The rate differs for sole proprietors based on annual turnover.
• Sales Tax: While not an employee deduction, the standard sales tax rate is generally 18%, with some exceptions. As of the 2023/24 financial year, it increased to 20% for imported goods and hotel, restaurant, and bar services.
• Excise Duties: Vary by product. The 2024/25 Financial Act introduced significant changes to these rates.
• Customs Duties: Exemptions exist for imports of raw materials and intermediate goods, provided the finished goods are subject to customs duties upon leaving the company premises.

It's important to stay up-to-date with potential changes to these rates and regulations, as South Sudan's tax laws may be subject to modifications. This information is based on available data as of February 5, 2025. Consulting with a tax advisor is recommended for specific situations.

In South Sudan, a sales tax is levied on various goods and services. As of December 2nd, 2024, the standard rate for sales tax is 20% and applies to imported goods and services provided by hotels, restaurants, and bars.

Sales Tax Rates (Effective December 2nd, 2024)

• Standard Rate: 20% on imported goods, hotel services, restaurant services, and bar services.

Thresholds for Registration

Currently, there isn't a specified minimum turnover threshold for sales tax registration. Any business importing goods into South Sudan, producing goods within the country, or supplying certain services is required to register for sales tax.

Filing Requirements

• Invoices: Businesses must issue invoices for all transactions subject to sales tax.
• Returns: Monthly sales tax returns (Form 112) must be filed by the 15th day of the month following the tax period. This return should detail the value of produced and imported goods, as well as the provision of taxable services.
• Payment: Sales tax payments are due at the same time as the return filing deadline (15th of the following month).

Deadlines

• Monthly Sales Tax Return and Payment: 15th day of the month following the reporting period.
• Annual Income Tax Return: April 1st of the following year, applicable to Business Profits Tax and Personal Income Tax for entrepreneurs.

Exempt Goods and Services

Certain exemptions from sales tax exist, including:

• Goods and services covered by agreements with the South Sudanese government, the United Nations, diplomatic missions, or international donors, if directly related to the project or mission.
• Raw materials and intermediate goods (customs duty exemption applies; however, customs duties will be payable on the finished goods upon their exit from company premises).

Additional Information

• Sales tax is a consumption-based tax, not an income tax. For imports, sales tax is paid at the border and is calculated based on the customs value plus any import and excise duties.
• Advance Business Profit Tax (BPT): A 4% advance BPT is levied on imported goods. Businesses can claim this as a tax credit when filing annual BPT returns.
• Rental Income Tax: A 30% tax applies to income derived from rental investments for businesses operating exclusively in the real estate sector.

It's crucial for businesses in South Sudan to keep up-to-date with any changes in tax regulations and ensure timely compliance to avoid potential penalties and interest charges.

Please be aware that this information is current as of February 5, 2025, and may be subject to change due to updates in tax legislation or administrative practices. Consulting with a tax advisor is recommended for personalized guidance and to address specific circumstances.

South Sudan offers a range of tax incentives designed to attract investment and stimulate economic growth.

Business Profit Tax (BPT)

As of December 2nd, 2024, a 4% advance BPT has been reintroduced on imported goods. This serves as a prepayment towards the final BPT liability and can be claimed as a credit when filing annual returns. A 30% tax is levied on rental income for businesses operating exclusively in the real estate sector, after allowable deductions such as local council rates, city levies, and mortgage interest expense. There are also incentives applicable to specific income sources and investment priority areas.

Individual Income Tax (PIT)

Individual income tax rates remain progressive, ranging from 0% to 20%. Specific rates for 2025 are unavailable; however based on the most current information these are likely similar to the 2024 rates of :

• Monthly income up to SSP 5,000: 0%
• Monthly income SSP 5,001 - 10,000: 10%
• Monthly income SSP 10,001 - 15,000: 15%
• Monthly income above SSP 15,000: 20%

An 8% deduction from gross income is allowed for contributions to approved pension schemes or the National Social Insurance Fund (NSIF). Several exemptions from gross income exist, including:

• Wages of foreign diplomats, consular representatives, and liaison office personnel
• Wages of foreign representatives, officials, and employees of international organizations (governmental and non-governmental)
• Wages of donor agency employees and contractors involved in humanitarian aid work (subject to government agreements)
• Compensation for property damage, loss, or personal harm
• Interest and dividends (where withholding tax has been applied)
• Government employee pensions

Withholding Tax (WHT)

Withholding tax rates have been revised for government contracts as follows:

• Resident contractors: 15%
• Non-resident contractors: 20%

A 10% WHT has been introduced on mobile money commissions paid to dealers. Other WHT rates include:

• Dividends (residents and non-residents): 10%
• Interest (residents and non-residents): 10%
• Royalties (residents and non-residents): 10%
• Rent (residents): 20%
• Rent (non-residents): 10%
• Fees for technical/consultancy services or part-time work: 20%

Customs and Excise Duties

Exemptions from customs duties are available for imported raw materials and intermediate goods. However, customs duties are payable on the finished goods upon their exit from the company's premises. The excise tax regime has undergone substantial changes with revisions to rates across various products.

Additional Incentives

Further incentives include capital allowances (20%-100%), deductible annual allowances (20%-40%), and other depreciation allowances (8%-20%). Additional incentives are granted on a case-by-case basis, particularly for investments in strategic or transformational sectors. These sectors include agriculture, infrastructure (physical and social), mining, energy, natural resources, forestry, manufacturing, transport, telecommunications, media, ICT, and financial institutions. Application procedures and specific eligibility criteria for these case-by-case incentives are managed by the South Sudan Investment Authority.

Please note that this information is current as of February 5, 2025, and might be subject to change. It is recommended to consult with a tax advisor or the South Sudan Revenue Authority for the most up-to-date details.